May 4, 2010— -- Those little fees sure do add up. Airlines across the county have been changing customers extra for all sorts of services, from checking bags to changing reservations, and it's paying off handsomely for them.
Last year, U.S. airlines took in more than $7.8 billion in fees from passengers, according to the Department of Transportation's Bureau of Transportation Statistics. And those fees are rising quickly. In the last three months of 2009, the airlines charged passengers $1.9 billion in extra fees, up a whopping 18.3 percent from the same period the prior year.
And there are signs that things are only going to get worse for passengers.
Delta, followed by Continental, then United, then US Airways and finally American, all raised their checked-bag fees at the start of 2010. And if that wasn't bad enough, Spirit announced last month that it will soon charge up to $45 to place your carry-on bag in the overhead bin.
"You can easily spend more on fees these days than on your fare," said George Hobica, president of airfarewatchdog.com. "Worst case scenario: an unaccompanied minor traveling with his pet cat and checking two pieces of luggage each weighing over 50 pounds."
From October to December, the airlines collected $736 million in baggage fees, $564 million from reservation change fees and $611 million from other ancillary fees, such as pet transportation fees and frequent flier award program mileage sales.
Those figures don't include the myriad other ways -- besides the actual cost of your ticket -- that the airlines make money off passengers. Those include charging for seat assignments and the on-board sales of food, drinks, pillows, blankets and even TV shows and movies.
The airlines find these fees necessary for their survival. Even with all those add-ons, most of the legacy airlines still lost money while the so-called discount or low-cost airlines just eked out a profit.
"Airlines have become addicted to fees in the same way that state government has become addicted to cigarette taxes," Hobica said. "I don't see them going away anytime soon, if ever. They spell the difference between insolvency (as in ceasing to fly) and merely losing billions of dollars. Perhaps with fees plus consolidation, the U.S. airline industry will eke out a small profit."